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CB Richard Ellis plans $2.2 billion in term loans via Credit Suisse
By Sara Rosenberg
New York, Oct. 31 - CB Richard Ellis Group, Inc. is planning on coming to market with $2.2 billion in senior secured term loan debt, company officials said in a conference call Tuesday.
Credit Suisse is the lead bank on the deal.
The term loan debt will be comprised of a $1.2 billion term loan A and a $1 billion term loan B, officials said in the call.
Proceeds will be used to fund the acquisition of Trammell Crow Co. for $49.51 per share of common stock in cash. The transaction is valued at $2.2 billion, including the assumption of Trammell's corporate debt as well as transaction and integration costs.
CB Richard Ellis is planning to leave its $600 million revolving credit facility in place, but amend it to allow for the acquisition and raise pricing to reflect the increased debt levels. However, the company does have a commitment for a replacement $600 million revolver as a cautionary measure.
The acquisition is expected to increase the company's net debt/EBITDA ratio to 2.4 times, with an interest coverage ratio of 6.0 times on a pro forma 2006 basis, officials added in the call.
Upon completion of the transaction, the company will have combined pro-forma 2006 revenues of $4.4 billion and 21,000 employees.
The acquisition is expected to close either in late 2006 or early 2007, subject to approval by Trammell's shareholders and federal regulatory agencies as well as other customary conditions.
CB Richard Ellis also announced on Tuesday that it plans to announce a tender offer later this week for its 9¾% senior notes. Funding for the tender is expected to come from operating cash and, if necessary, revolver borrowings.
CB Richard Ellis is a Los Angeles-based commercial real estate services firm. Trammell is a Dallas-based provider of commercial real estate services.
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